Seven Examples or Calculations of Income From Salaries During the F.Y.2014-15
UPDATE INCOME FROM SALARIES DURING THE FINANCIAL YEAR 2014-15;
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Example 1
(A) Calculation of Income tax in the case of an employee (Male or Female) below the age of sixty years and having gross salary income of:
i) Rs.2,50,000/- ,
ii) Rs.5,00,000/- ,
iii) Rs.10,00,000/-
iv) Rs.20,00,000/-.
v) Rs. 1,10,00,000/-
(B) What will be the amount of TDS in case of
above employees, if PAN is not submitted by them to their
DDOs/Offices:
|
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
Rupees (iv)
|
Rupees (v)
|
|
Gross Salary Income (including
allowances)
|
2,50,000
|
5,00,000
|
10,00,000
|
20,00,000
|
1,10,00,000
|
|
Contribution of G.P.F.
|
45,000
|
50,000
|
1,00,000
|
1,00,000
|
1,00,000
|
Computation of Total Income and tax payable thereon
|
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
Rupees (iv)
|
Rupees (v)
|
|
|
Gross Salary
|
2,50,000
|
5,00,000
|
10,00,000
|
20,00,000
|
1,10,00,000
|
|
|
Less: Deduction U/s 80C
|
45,000
|
50,000
|
1,00,000
|
1,00,000
|
1,00,000
|
|
|
Taxable Income
|
2,05,000
|
4,50,000
|
9,00,000
|
19,00,000
|
1,09,00,000
|
|
|
|
|
|
|
|
|
|
|
(A)
|
Tax thereon
|
Nil
|
18,000*
|
1,05,000
|
3,95,000
|
3095000
|
|
Surcharge
|
|
|
|
|
309500
|
|
|
Add:
(i)
Education Cess @ 2%.
(ii)
Secondary
and Higher Education
Cess @1%
|
Nil Nil
|
360
180
|
2100
1050
|
7,900
3950
|
68090
34045
|
|
|
Total tax payable
|
Nil
|
18,540
|
1,08,150
|
406850
|
3506635
|
|
|
|
|
|
|
|
|
|
|
(B) TDS under sec. 206AA
in case where PAN is not furnished
by the employee
|
Nil
|
90,000
|
1,30,000
|
406850
|
3506635
|
|
* includes Rebate of Rs 2000 u/s
87A
Example 2
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent (With valid PAN furnished to employer).
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Gross Salary
|
4,00,000
|
|
2
|
Amount spent on treatment of a dependant, being person with
disability (but not severe
disability)
|
7000
|
|
3
|
Amount paid to LIC with regard to annuity for the maintenance of a dependant,
being person with disability( but not severe disability)
|
60,000
|
|
4
|
GPF Contribution
|
25,000
|
|
5
|
LIP Paid
|
10,000
|
|
6
|
Interest Income on Savings Account
|
12,000
|
Computation of Tax
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Gross Salary
|
4,00,000
|
|
2
|
Add: Income from Other Sources
Interest Income on Savings Account
|
Rs 12,000
|
|
3
|
Gross
Total Income
|
4,12,000
|
|
4
|
Less: Deduction U/s 80DD (Restricted to Rs.50,000/- only)
|
50,000
|
|
5
|
Less: Deduction U/s 80C (i) GPF
Rs.25,000/-
(ii) LIP Rs.10,000/- = Rs.35,000/-
|
35,000
|
|
6
|
Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-)
|
10000
|
|
7
|
Total Income
|
3,17,000
|
|
8
|
Income Tax thereon/payable
(includes Rebate of Rs 2000 as
per Section 87A)
|
4,700
|
|
9
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
94
47
|
|
10
|
Total Income Tax
payable
|
4,841
|
|
11
|
Rounded
off to
|
4,840
|
Example 3
Calculation of Income Tax in the case of an employee below age of sixty years where medical
treatment expenditure was borne by the employer (With valid PAN furnished to employer).
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Gross Salary
|
5,20,000
|
|
2
|
Medical Reimbursement by employer on the treatment of self and dependent family member
|
35,000
|
|
3
|
Contribution of GPF
|
20,000
|
|
4
|
LIC Premium
|
20,000
|
|
5
|
Repayment of House Building Advance
|
25,000
|
|
6
|
Tuition fees
for two children
|
60,000
|
|
7
|
Investment in Unit-Linked Insurance Plan
|
30,000
|
|
8
|
Interest Income on Savings Account
|
8,000
|
|
9
|
Interest Income on Time Deposit
|
15,000
|
Computation of Tax
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Gross Salary
|
5,20,000
|
|
2
|
Add: Perquisite in respect of reimbursement
of Medical Expenses
In excess of Rs.15,000/- in view of
Section 17(2)(v)
|
20,000
|
|
3
|
Income from Other Sources
i) Interest Income
on Savings Account Rs 8,000
ii) Interest Income on Savings Account Rs
15,000
|
23,000
|
|
4
|
Gross
Total Income
|
5,63,000
|
|
5
|
a.Less: Deduction U/s 80C
(i) GPF Rs.20,000/-
(ii)
LIC Rs.20,000/-
(iii)
Repayment of House Building Advance Rs.25,000/-
(iv)
Tuition fees
for two children Rs.60,000/-
(v)
Investment in Unit-Linked Insurance
Plan Rs.30,000/-
Total =Rs.1,55,000/-
Restricted
to Rs. 1,50,000/-
b. Less: Deduction u/s 80TTA on Interest Income on savings
account (restricted to Rs 8000/- available only on Savings account interest) Rs 8,000/-
Total deduction available Rs 1,58,000/-
|
1,58,000
|
|
6
|
Total Income
|
4,05,000
|
|
7
|
Income Tax thereon/payable
(includes Rebate of Rs 2000 as
per Section 87A)
|
13,500
|
|
8
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
270
135
|
|
9
|
Total Income Tax
payable
|
13,905
|
|
10
|
Rounded
off to
|
13,910
|
Example 4
Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Salary
|
3,50,000
|
|
2
|
Dearness Allowance
|
2,00,000
|
|
3
|
House Rent Allowance
|
1,40,000
|
|
4
|
House rent paid
|
1,44,000
|
|
5
|
General Provident Fund
|
60,000
|
|
6
|
Life Insurance
Premium
|
4,000
|
|
7
|
Subscription to Unit-Linked Insurance Plan
|
50,000
|
Computation of total income and tax payable thereon
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Salary + Dearness Allowance + House Rent
Allowance 3,50,000+2,00,000+1,40,000 =
6,90,000
|
6,90,000
|
|
2
|
Total Salary Income
|
6,90,000
|
|
3
|
Less: House Rent allowance exempt U/s 10(13A):
Least of:
(a). Actual amount of
HRA received= 1,40,000 (b).
Expenditure of rent
in excess of 10% of
salary
(including D.A. presuming that D.A.
is taken
for retirement benefit)
(1,44,000-55,000) = 89,000
(c). 50% of Salary(Basic+ DA) = 2,75,000
|
89,000
|
|
4
|
Gross
Total Income
|
6,01,000
|
|
5
|
Less: Deduction U/s 80C
(i). GPF Rs.60,000/-
(ii). LIC Rs. 4,000/-
(iii). Investment
in Unit-Linked Insurance
Plan Rs.50,000/-
Total =Rs.1,14,000/-
|
1,14,000
|
|
6
|
Total Income
|
4,87,000
|
|
7
|
Tax payable on total income
(includes Rebate of Rs 2000 as
per Section 87A)
|
21700
|
|
8
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
434
217
|
|
9
|
Total Income Tax
payable
|
22351
|
|
10
|
Rounded
off to
|
22350
|
Example 5
Illustrating
valuation of perquisite and calculation of tax in the case of an employee
below age of sixty years of a private company
in Mumbai who was provided
accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid
PAN furnished to employer).
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Salary
|
7,00,000
|
|
2
|
Bonus
|
1,40,000
|
|
3
|
Flat at
concessional rate (for
ten month). = Rs.3,60,00
|
3,60, 000
|
|
4
|
Hotel rent paid by employer (for two month)
|
1,00,000
|
|
5
|
Cost of furniture
|
2,00,000
|
|
6
|
Free gas, electricity, water etc. (Actual bills paid by company)
|
40,000
|
|
7
|
Rent recovered from employee
|
60,000
|
|
8
|
Subscription to Unit Linked
Insurance Plan
|
50,000
|
|
9
|
Life Insurance
Premium
|
10,000
|
|
10
|
Contribution to recognized P.F.
|
42,000
|
COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:
|
S.No.
|
Particulars
|
Rupees
|
|
|
1
|
Salary
|
7,00,000
|
|
|
2
|
Bonus
|
1,40,000
|
|
|
3
|
Total Salary(1+2) for the purpose of valuation of perquisites (12 months)
|
8,40,000
|
|
|
Valuation of
perquisites
|
|||
|
4(a)
|
Perquisite
for flat:
Lower of (15% of salary
for 10 months
= Rs.1,05,000/-) and (actual
rent paid= Rs 3,60,000) i.e. Rs. 1,05,000/-
Less : Rent recovered Rs.
60000/-
|
Rs 45,000
|
1,38,600
|
|
4(b)
|
Perquisite
for hotel :
Lower of (24% of salary of 2 months=Rs 33,600) and (actual payment= Rs 1,00,000)
|
Rs 33,600
|
|
|
4(c)
|
Perquisites for furniture
@ 10% of cost
of Rs.2,00,000
|
Rs 20,000
|
|
|
4(d)
|
Perquisite for free
gas, electricity, water etc.
|
Rs 40,000
|
|
|
4
|
Total
|
1,38,600
|
|
|
5
|
Gross Total Income
(Rs.8,40,000+ 1,38,600)
|
9,78,600
|
|
|
6
|
Gross Total Income
|
9,78,600
|
|
|
7
|
Less: Deduction
U/s 80C:
(i). Provident Fund (80C) :
Rs.42,000/-
(ii). LIC (80C) :
Rs.10,000/-
(iii). Subscription to Unit Linked Insurance
Plan(80C) : Rs.50,000/-
Total = Rs.1,02,000/-
|
1,02,000
|
|
|
8
|
Total Income
|
8,76,600
|
|
|
9
|
Tax Payable
|
1,00,320
|
|
|
10
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
2,006
1,003
|
|
|
11
|
Total Income Tax
payable
|
1,03,329
|
|
|
12
|
Rounded off to
|
1,03,330
|
|
Example 6
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private
Company posted at Delhi and repaying
House Building Loan (
With valid PAN furnished
to employer).
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Salary
|
4,00,000
|
|
2
|
Dearness Allowance
|
1,00,000
|
|
3
|
House Rent Allowance
|
1,80,000
|
|
4
|
Special Duties Allowance
|
12,000
|
|
5
|
Provident Fund
|
60,000
|
|
6
|
LIP
|
10,000
|
|
7
|
Deposit in NSC VIII issue
|
30,000
|
|
8
|
Rent Paid by the
employee for house hired by her
|
1,20,000
|
|
9
|
Repayment of House Building Loan (Principal)
|
60,000
|
|
10
|
Tuition Fees
for three children (Rs.10,000 per child)
|
30,000
|
Computation of total income and tax payable thereon
|
S.No.
|
Particulars
|
Rupees
|
|
1
|
Gross Salary (Basic+DA+HRA+SDA)
|
6,92,000
|
|
|
Less: House rent allowance exempt U/s 10 (13A) Least of:
(a). Actual amount of
HRA received. :Rs. 1,80,000 (b).
Expenditure on rent
in excess of 10% of
salary
(Including D.A.)assuming D.A. is
included for
retirement benefits (1,20,000- 50,000) :Rs. 70,000
(c). 50% of salary (including D.A) :Rs. 2,00,000
|
70,000
|
|
2
|
Gross Total Taxable Income
|
6,22,000
|
|
|
Less: Deduction U/s 80C
(i). Provident Fund :
Rs. 60,000
(ii). LIP :
Rs. 10,000
(iii). NSC VIII
Issue :
Rs. 30,000
(iv). Repayment
of HBA : Rs. 60,000 (v).
Tuition
Fees (Restricted to two children) : Rs.
20,000
Total : Rs. 1,80,000
Restricted
to Rs. 1,50,000
|
1,50,000
|
|
|
Total Income
|
4,72,000
|
|
|
Income Tax thereon/payable
(includes Rebate of Rs 2000 as
per Section 87A)
|
20,200
|
|
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
404
202
|
|
|
Total Income Tax
payable
|
20,806
|
|
|
Rounded
off to
|
20,810
|
Example 7
A. Calculation of Income tax in the case of a retired
employee above the age of sixty years but below the age of 80
years and having gross pension of:
|
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
|
Gross Pension
|
4,50,000
|
8,00,000
|
12,50,000
|
|
Contribution of P.P.F.
|
70,000
|
1,00,000
|
1,50,000
|
B .What will be the amount of TDS in case of
above employees, if PAN is not submitted by them to their
DDOs/Offices:
Computation of Total Income and tax
payable thereon
|
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
|
Gross Pension
|
4,50,000
|
8,00,000
|
12,50,000
|
|
Less: Deduction U/s 80C
|
70,000
|
1,00,000
|
1,50,000
|
|
Taxable Income
|
3,80,000
|
7,00,000
|
11,00,000
|
|
|
|
|
|
|
Tax
thereon (A)
|
6,000
|
60,000
|
1,50,000
|
|
Add:
(i)
Education Cess @ 2%.
(ii)
Secondary
and Higher Education Cess @1%
|
120
60
|
1200
600
|
3000
1500
|
|
Total tax payable
|
6,180*
|
61,800
|
1,54,500
|
|
|
|
|
|
|
B. TDS
under sec. 206AA in case where PAN is
not furnished by the employee
|
16,000
|
80,000
|
1,60,000
|
*includes Rebate of Rs 2000 as per Section 87A
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